Sandra Brox is to retire from the partnership of Brox and Associates as at December 31, 2015. After closing the accounts, the capital balances of the partners are as follows: Sandra Brox, $144,600; Amelia Donald, $105,000; and Alex Caesar, $95,000. They have shared net income and net losses of the partnership in a ratio of 4:2:1. The partners agree that the inventory should be decreased by $1,550, and the allowance for doubtful accounts should be increased by $3,000. Brox agrees to accept a note for $100,000 in partial settle- ment of her ownership equity. The remainder of her claim is to be paid in cash.

Instructions

1. Provide the journal entry for the asset revaluation.

2. Provide the journal entry under the following independent situations:

a. Brox received cash of $42,000.

b. Brox received cash of $45,000.

c. Brox received cash of $36,000.

3. Provide the journal entries to close the income summary and the withdrawals accounts on December 31, 2016, assuming net income of $240,000 and monthly withdrawals of $7,000 by Donald and $5,000 by Caesar.